Biofrontera(US:BFRI)2022-08-12 21:37Financial Data and Key Metrics Changes - Total revenues for the first half of 2022 were $14.2 million, an increase of 34% compared to $10.6 million in the same period last year, primarily driven by a $3.5 million increase in Ameluz revenue [13][14] - Total operating expenses for the first half of 2022 were $23.5 million, up from $17.8 million in the first half of 2021, with selling, general and administrative expenses increasing by 66% [14] - Net income for the first half of 2022 was $4.7 million or $0.26 per diluted share, compared to a net loss of $7.2 million or a loss of $0.90 per share for the first half of 2021 [14] - Adjusted EBITDA was negative $11.3 million for the first half of 2022, compared to negative $5.7 million for the same period in 2021 [15] Business Line Data and Key Metrics Changes - In Q2 2022, total revenues were $4.5 million, a decrease of 24% from $5.9 million a year ago, attributed to advanced purchasing of Ameluz in Q1 prior to a price increase [17] - Cost of revenues declined by 18% in Q2 2022, primarily due to lower Ameluz sales [17] - The net loss for Q2 2022 was $0.9 million, compared to a net loss of $3.7 million in Q2 2021 [18] Market Data and Key Metrics Changes - Biofrontera's revenue for the first half of 2022 was the highest ever, up more than 102% compared to 2020 and up more than 22% versus the pre-COVID year 2019 [19] - The company has increased headcount by approximately 20% since Q2 2021, positioning for greater market penetration [21] Company Strategy and Development Direction - The company aims to achieve deeper sales penetration among current customer accounts and plans to expand the salesforce in 2023 [22][23] - Biofrontera's commercial strategy focuses on educating the industry on the importance of field therapy and raising awareness of product efficacy [24][25] - The company is committed to strengthening its intellectual property and has received patents for PDT and Ameluz, enhancing its competitive position [32][35] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed financial guidance for 2022, expecting total revenues to increase by at least 30% compared to 2021 [22] - The management highlighted the importance of recent changes in CPT codes for PDT, which have improved reimbursement for practitioners [78] - The company believes that the growing therapeutic value and recognition among dermatologists will drive market share growth [51] Other Important Information - Biofrontera's new Ameluz marketing campaign received a Gold Award of Excellence from The Communicator Awards [27] - The company has initiated support for patient advocacy and awareness events to address solar damage and non-melanoma skin cancer [26] Q&A Session Summary Question: Can you help us with the likely magnitude of pre-price hike buy-in in the first quarter? - Management acknowledged a dip in Q2 due to advanced purchasing in Q1 but did not specify an exact amount [53] Question: Is the current quarterly SG&A rate a good go-forward rate for the quarters and the second half? - Management indicated that some expenses in SG&A were related to financing transactions and legal expenses, which are not part of a normal run rate [54] Question: Can we have a trial by trial update of ongoing trials and any changes to the timing of the expectation of data release? - Management provided updates on various clinical trials, including a Phase 3 study for superficial basal cell carcinoma and a Phase 2 study for moderate to severe acne, with expectations for readouts in 2023 [56][61] Question: Have you been generating any revenue from Xepi? - Management confirmed that they have not focused on Xepi recently due to manufacturing issues but are managing inventory while supporting sales [64] Question: Looking forward, what can we expect regarding sales and marketing expenses? - Management indicated that while there won't be massive financial expansion, there will be development in sales and marketing, with benefits expected to pick up in Q3 and Q4 [66] Question: What is the IP position in the United States regarding the novel illumination protocol? - Management confirmed that a patent has been filed in the U.S. and they are confident in its approval, which would further protect Ameluz [70] Question: Is Biofrontera considering M&A as an additional lever for growth? - Management stated they are open to evaluating various ways to expand the business, including potential M&A opportunities [74][75] Question: Why do you believe that revenue growth is going to accelerate compared to earlier years? - Management cited investments in commercial infrastructure and changes in reimbursement as key factors for expected revenue acceleration [78][80]